Marilyn Harbin  
***Who Is Paying That Monthly Bill?***

Where's the money coming from?

Correct - it's coming from your compensation plan. That is money that you will never receive in your check. It's gone. That "stolen" income is a big reason for network marketing business failure.

Now ... when do YOU plan on using that building?

Did I hear you say, "Never!"?

Exactly. You will never use that building, yet you are paying for it. And that's not all. These bloated network marketing companies brag about their call center, and the hundreds of employees they have sitting there, ready to take your order, giving you the best possible customer service.
But every one of those people is a salaried employee. They get health benefits, maternity leave, vacation leave, sick leave. The company has sexual harrassment insurance. Those employees get bonuses over the years, raises. Each one works in an office at a desk, with a phone and computer.

That is a monthly bill.

***Who Is Paying THIS Bill?***

Exactly. YOU are! (Are you beginning to notice a nasty trend?)

That's more money again that will never come back to you in the compensation plan.

Now ... where do you think THIS business model will go in the future? Do you think your company will have less expenses or more expenses?

Sure. It'll be more. As the building gets older, it needs more maintenance. The longer people work there, the more salary they expect. As the business builds, they'll outgrow the building ... and, of course, build another new building!

Another good indicator of the heart of a company is, where is the warehouse located? Most cities have a warehouse district, very low-rent, low cost. It makes sense for businesses to keep their stock there. But most MLM companies have the warehouse right next to their big new building.

Why?

Because it's more impressive, and they can say, "Look at us! Look what we've done!"

***Who Pays For That Extra Expense?***

Yes, of course. It is you.

So what's the solution? The key is to find a streamlined MLM business ... one that doesn't feel the need to put on a gaudy show with YOUR money!

I'll talk more about that in just a moment.

First, let me give you an example of how this high-overhead business model affects YOUR ability to build your business.

I'm thinking of 3 different companies right now. They all market the same product, a multi-vitamin pack. It's an awesome product, flat-out works, and all 3 companies market the identical formula, identical raw ingredients.

Except Company #3 has also added to the formula a chelated enzyme to allow you to digest & absorb nutrients better.

Now would you agree with me, that to produce that product, same quantity, same quality, same formula, the cost of production for those companies is within pennies of each other?

Of course it is.

Well, Company #1 markets the 30-day supply of that vitamin pack for $117. So do you think you're going to be able to retail that to someone?

Do you know anybody who would gladly pay you $117 for a 30-day supply of a multi-vitamin pack, regardless of how great it is?

I'll bet you don't. It'll be tough, for sure. So therefore, you're going to have a challenge to retail that product.

Company #2 sells the same formula for $108. It's still expensive. You're still going to have a challenge retailing that.

Company #3, which has the same formula, with the added chelated enzyme, so you can digest & absorb it better, sells it for $39.95.

Now, I ask you, is that affordable? Do you think you know people who may purchase that product from you?

Absolutely.

***The Business Model Drives The Behavior***

So what kind of behavior do these different business models create in the field? Here's what happens. People who market the more expensive products spend their time recruiting. This is where the money is made for them. There's no money in retailing for them, because nobody's going to pay that high price for that product.

So what do they have to do? They have to recruit, recruit, recruit.

And what happens after you join them? When they sponsor you into the business, they have no time to work with you! You're in, they got the commission, and they have to move on to recruit the next person.

They don't have time to work with you because their business is built on recruiting, since they can't possibly retail products. This is a big reason for your network marketing business failure.

Now, do you have any idea why Company #3 can afford to sell the same formula, with the added chelated enzyme for better digestion, better absorption, at $39.95?

Why do you think they can do that?

"They must not have the overhead."

Exactly. They have way less overhead than the other 2 companies. Their warehouse is in the warehouse district. No multi-million dollar home office.

They take 97% of their orders automated over the internet, so they need very few actual employees.

***Company 3 Has Just a Small Fraction of The Overhead of Company 1 or Company 2***

So it's a more distributor-friendly business model.

I've found that 92% of the population doesn't like to sell and doesn't want to be sold to. How aggressive do you think you have to be to move a box of a 30-day supply of a multi-vitamin pack at $117 each?

Pretty darned aggressive, don't you think?

And let me ask you this. Who do you think is buying this? You don't know anybody who'd buy it. I sure don't know anybody who'd spend $117 for it. But they sell plenty of it. Who do you think is buying it?

It's the distributors. The distributors are buying it. Why? Because they have to qualify to get their bonus check. That's the only reason they're buying it. This pricing doesn't create a retailing behavior.
Oct 2nd 2007 13:45